For the Quarter Ending September 2024
North America
The North American Coconut Oil market demonstrated remarkable strength throughout Q3 2024, with prices reaching a higher level similar to that of the European region. Amid significant supply chain constraints, robust industrial demand, and adverse weather conditions affecting the overall coconut oil production continued to impact the trading sentiments concerning coconut oil, thereby supporting continuous higher prices.
The market dynamics were pronounced in the northern region, persistent upward price momentum dominated trading sentiment. The quarter was characterized by substantial supply-side pressures, as global logistics disruptions and manufacturing facility closures created significant inventory constraints across the region. This supply tightness coincided with heightened demand from key end-use sectors, particularly the pharmaceutical and cosmetics industries, which maintained aggressive procurement strategies to secure volumes.
Adding to the complex market environment, the depreciation of the US dollar against major currencies introduced additional pricing pressures, effectively increasing import costs and influencing broader market sentiment. This currency impact, combined with elevated transportation costs, contributed to the overall bullish price trajectory.
Asia Pacific
The third quarter of 2024 has been a period of increasing prices for Coconut Oil in the APAC region, with the Philippines experiencing the most significant price changes. Several factors have influenced the market, including rising demand from end-users, improved manufacturing margins, and favorable procurement conditions. Additionally, the stabilization of prices, combined with strong demand, has created a positive trading environment. The quarter recorded a 14% price change from the previous quarter, reflecting a steady upward trend. Overall, the market faces a complex interplay of supply and demand factors, creating a dynamic pricing environment. On the supply side, production challenges in major producing countries such as adverse weather conditions, including typhoons and droughts, could have severely impacted the coconut yields. Supported by this, disease outbreaks, such as coconut leaf wilt, further threaten production levels. Coupled with this, rising costs for essential inputs like fertilizers and labor, these factors contribute to supply constraints and upward price pressure. Additionally, coconut oil is emerging as a preferred alternative to palm oil, which faces environmental scrutiny. With respect to the demand side, downstream purchasing sentiments concerning coconut oil fluctuated between moderate and high levels, reflecting the complex interplay of market forces. A notable uptick in purchasing activity was observed, particularly from end-user oleochemical industries, indicating growing confidence among market participants. Transactions took on an optimistic tone, supported by ease in global freight costs. The industry's resilience was further bolstered by a decrease in freight charges, which enhanced the momentum of higher exports. As a result, throughout the quarter, the overall trend in Coconut Oil pricing has been positive, reflecting a healthy demand-supply balance and favorable market conditions.
Europe
Throughout Q3 2024, the European Coconut oil market witnessed a substantial uptrend in prices concerning coconut oil, driven by a myriad of factors. High global demand, supply constraints, and currency fluctuations played significant roles in shaping the pricing landscape. The market grappled with disruptions such as production delays, adverse weather conditions, and trade disputes, contributing to the overall price surge. Buyers across the importing nations consistently stocked up on additional quantities, which was further affected by delivery delays from export nations. Additionally, seizing upon the surge in demand, growing food security concerns, due to potential global crop yield reductions, led to increased stockpiling behavior, further driving up demand, resulting in a continuous rise in its prices. Supporting this, both input costs and output prices experienced inflation rates that aligned closely with long-term averages, reinforcing the market's stability and predictability. This favorable cost environment allowed suppliers to engage in strategic pricing adjustments, ensuring profitability while maintaining competitiveness. As a result within the European region, the Netherlands experienced the most significant price changes, with a recorded 19% increase from the previous quarter of Q3.
For the Quarter Ending June 2024
North America
In the U.S., the coconut oil market is poised for significant shifts, mirroring trends observed in the European, particularly the Netherlands, market. The second quarter of 2024 reveals a dynamic landscape with pronounced price volatility, characterized by distinct market behaviors.
April 2024 initiated with robust momentum, marked by rising prices due to insufficient inventory and heightened regional demand. Suppliers grappled with product availability issues, though reduced freight costs provided some relief, enabling higher import quotes despite of persistent appreciation of the dollar against other nations' currencies. However, May 2024 experienced a substantial price decline, attributed to waning international demand and heightened competition from alternative edible oils. Economic uncertainties and evolving consumer preferences posed challenges, leading to reduced downstream consumption in the personal care, food, and oleochemical sectors. Consequently, procurement activities diminished, resulting in higher stockpile levels among merchants. While, yet again June 2024 marked a resurgence in the market, concluding the quarter on a high note.
Coconut oil prices saw a steady rise, driven by increased global demand from end-users and limited availability from key producing nations, especially the Philippines. Market dynamics throughout the quarter were shaped by decreased coconut production in the Philippines, ongoing production and supply delays, and strategic adjustments by market participants to mitigate risk and sustain stability. As a result, the quarter culminated with traders actively offloading stocked inventories at higher costs, reflecting a generally positive market sentiment despite the mid-quarter dip. This volatility underscores the U.S. coconut oil market's susceptibility to global economic conditions, supply chain disruptions, and shifting consumer preferences, necessitating vigilant market strategies.
Asia Pacific
In Q2 2024, the Southeast Asian coconut and coconut oil market experienced significant volatility, driven by a complex interplay of factors affecting both supply and demand. The quarter began with rising demand for organic coconuts and related materials, primarily due to fears of impending weather events in the Philippines and surrounding areas. This surge in demand, coupled with higher production costs in the Philippines (including increased prices for fertilizer, labor, and input coconuts), initially pushed prices upward. The threat of a severe El Niño season further intensified demand for Southeast Asian-imported coconut ingredients. This weather phenomenon caused major problems in key growing countries like Indonesia, the Philippines, and Sri Lanka, leading to raw material shortages and fierce competition among stakeholders. In response to a noticeable increase in purchasing activity, inquiries from end-user food industries surge at a continuous rate with market transactions consistently leaning in the northerly direction. However, as the quarter progressed, market dynamics shifted. May saw a steady drop in market quotations from key importing nations. Desiccated coconuts from the Philippines and Indonesia traded firmly as traders focused on clearing inventories at lower costs. A significant rise in global freight charges, container shortages, and weakened market inquiries from end-users in various sectors led to muted new orders and reductions in placed consignments. June continued the downward price trend, influenced by persistent increases in freight costs, making imports more expensive. This highlighted the significant impact of logistics and transportation expenses on commodity prices in import-dependent markets. Throughout the quarter, coconut oil inventories remained high relative to end-user inquiries. Stable prices in competing oils (palm, soybean, sunflower) may have indirectly influenced coconut oil pricing by shifting market preferences. By the end of Q2, the market was characterized by a firm trend in coconut prices on the supply side, limited new orders from pharmaceutical end-users, and just-in-time regional acquisitions. The overall market transaction remained lean, with trade occurring primarily on a need basis from the Philippines.
Europe
The European coconut oil market, particularly the netherlands market experienced significant volatility, characterized by an overall upward trend in prices and optimistic trading sentiment. The quarter can be divided into three distinct phases, each with its own market dynamics. April 2024 saw a strong start to the quarter, with prices rising due to insufficient inventory and increasing regional demand. Suppliers struggled with product availability, while easier freight costs provided some resilience to trades, increasing import quotes. Traders focused on clearing inventories at higher prices amid continuous regional inquiries. Currency devaluation, particularly the depreciation of the Euro against the dollar, provided cost support to coconut oil suppliers and exporters. The Netherlands Manufacturing PMI rose to 51.3, signaling improved operating conditions and increased production levels. May 2024 brought a significant price drop, driven by subdued international demand and increased competition from alternative edible oils. Economic uncertainties and shifting consumer preferences contributed to market challenges. Reduced downstream consumption from personal care, food, and oleochemical industries led to decreased procurement activities and higher stockpile levels among merchants. June 2024 saw a market rebound, ending the quarter on an optimistic note. A steady uptick in coconut oil prices was propelled by increased global demand from end-users, coupled with limited product availability from producing nations, particularly the Philippines. This supply constraint exacerbated the imbalance between demand and supply, leading to higher prices. Throughout the quarter, market dynamics were influenced by factors such as decreased coconut production in the Philippines, ongoing delays in production and supply, and shifting strategies among market participants to manage risk and maintain stability. The quarter ended with traders actively selling their stocked-up inventories at higher costs, reflecting the overall positive sentiment in the market despite the mid-quarter dip. This volatility underscores the coconut oil market's sensitivity to global economic conditions, supply chain disruptions, and changing consumer preferences.
For the Quarter Ending March 2024
North America
Throughout the first quarter of 2024, the prices of coconut oil across the North American region followed the market trajectory of exporting nations, particularly in APAC. Prices rose considerably throughout the quarter due to increased downstream demand, driven by efforts to replenish inventories amid growing advocacy for the biofuels sector. Furthermore, in response to increased demand, market participants raised prices to boost profitability, selling the goods at a relatively higher cost than projected.
Adding complexity to this scenario are geopolitical tensions and trade interruptions, which have further compounded market sentiments. Export challenges, such as the redirection of shipping routes via the Cape of Good Hope to avoid the Red Sea, have triggered a chain reaction of consequences, including heightened shipping costs, order cancellations, and delays in container movement. As a result, suppliers and traders continue to grapple with a limited coconut oil supply, insufficient to meet the continuously rising regional inquiries from downstream sectors, particularly from the food and personal care industries.
Furthermore, as part of this strategic pricing maneuver to optimize profits amid a robust US dollar, there are lingering concerns regarding possible price hikes stemming from Mississippi River bottlenecks caused by weather conditions. It's imperative to address potential delays and related expenses to prevent trade disruptions and export delivery interruptions. Consequently, market players in the US have intensified inquiries to exporting countries, exacerbating upward price pressure.
Asia Pacific
Coconut oil prices in the APAC region during Q1 2024 exhibited an overall optimistic trend, influenced by significant factors. In the Philippines, which saw the most notable price changes, there was a substantial increase of over 4 percent compared to the previous quarter. This rise was primarily attributed to increased demand from regional and overseas markets, limited supplies, rising freight charges ahead of potential trade disruptions resulting in delayed consignments, and longer delivery times. Persistent heightened demand from various sectors, including food processing, cosmetics, and biofuels from major importing nations, kept overall exports from the Philippines strong. Concurrently, the Philippines experienced an uptick in international coconut oil prices, leading to increased exports and tighter domestic supply, thereby pushing prices higher. Furthermore, this upward trajectory of coconut oil prices was closely linked with escalating production costs, as coconut farmers faced rising expenses for fertilizers, labor, and transportation witnessed in other producing nations particulary Indonesia. These increased costs were subsequently passed on to consumers through higher coconut oil prices, further driving up overall market prices. Capitalizing on the opportune surge in demand, market participants adeptly initiated proactive price increases, strategically maneuvering to enhance profit margins amidst the growing market fervor. in Overall, the market remained positive, with exporting prices settling at USD 1290/MT FOB Quezon.
Europe
Coconut oil prices in the European region during Q1 2024 have undergone significant fluctuations, particularly impacting the Netherlands. Various factors have influenced market prices, including the decline in global coconut production, trade disruptions, and adverse weather conditions observed across exporting nations, particularly in the APAC region. These factors have resulted in a tightening of supply and delayed consignment arrivals, leading to elevated prices and an optimistic market outlook throughout the quarter. Despite a consistent increase in downstream inquiries for coconut oils from end-users in the food, cosmetics, and other sectors, the overall supply of coconut oil remains limited. Traders have been actively building up their inventories in anticipation of heightened demand. Additionally, buyers have been stockpiling additional quantities to mitigate delivery delays caused by the crisis in the Red Sea, thereby resulting in a higher import price further exacerbated by higher freight costs. Currency fluctuations have also impacted prices, with the Euro continuing to depreciate against the dollar. Purchases from regional markets have remained high, with traders willingly accepting higher quotations, contributing to higher import prices for coconut oil. In conclusion, the pricing environment for coconut oil in the European region, particularly in the Netherlands, was positive in Q1 2024, with import prices settling at USD 1560/MT CFR Rotterdam. Prices have been influenced by supply constraints, increased demand, trade disruptions, and currency fluctuations. While the manufacturing sector has shown signs of improvement with a softer contraction, the overall supply of coconut oil remains limited, leading to elevated prices.
For the Quarter Ending December 2023
North America:
Throughout Q4 2023 in North America, Coconut Oil prices followed a dynamic trajectory in line with the European market trend. Initially, starting from October 2023, prices declined due to weakened purchasing activity and ample availability of stocks in the domestic market. Despite being a cost-effective option, competition from lower prices of other edible oils, such as Sunflower oil, further pressured Coconut Oil prices downward. This trend persisted until the final weeks of December, with prices experiencing a moderate rebound in the middle of the fourth quarter. This rebound was supported by a sudden rise in regional offtakes, balanced with sufficient stocks among merchants, and influenced by higher fuel costs and port disruptions.
Congestion at major ports resulted in delays and significant increases in transportation costs, making the export of Coconut Oil more expensive. This, along with other factors, contributed to a spike in prices for consumers. The uncertain global economic situation and concerns about future supply shortages led to speculation and increased price volatility in the Coconut Oil market, further contributing to the overall price surge.
Despite navigating the dynamic market dynamics of Coconut Oil's downstream end-products, which exhibited a combination of organization and fluctuation, the supply of downstream products proved to be ample. This accommodated the overarching influx of inquiries and resulted in a noticeable decline in transaction volume within the market as December ended.
Asia Pacific:
Across the APAC region, particularly in the Philippines, coconut oil prices showed mixed trends in Q4 2023. Starting in October, prices steadily decreased due to a surge in production from extensive planting initiatives in major producing countries. The decline was also influenced by reduced costs of alternative edible oils like soybean, sunflower, and palm oils. However, in November, the Vegetable Oil Price Index increased by 3.4%, and international palm oil prices rebounded by over 6.0%, driven by active purchases and lower outputs. Also, the Philippines Manufacturing PMI rose to 52.7 in November, reflecting solid improvement and the fastest growth in ten months. Furthermore, this recovery in the prices was attributed to increased demand in various applications. Despite ongoing global logistics challenges and rising shipping costs, November saw an impact on domestic coconut oil prices. The appreciation of the Philippine peso against major currencies made exports, including other vegetable oils, more expensive for importing regions. Moving into December 2023, coconut oil costs declined again due to reduced global demand in recent months. Factors contributing to this included the increasing popularity of other vegetable oils and a shift toward healthier diets. On the overall supply side, market participants maintained sufficient coconut oil inventories to meet arriving inquiries, both domestically and abroad. Lastly, trade activity in this period primarily cantered around responding to incoming orders, aligning with the prevailing export momentum.
Europe:
The pricing of Coconut Oil in the European region exhibited volatility throughout Q4 2023, influenced by various factors. Initially, Germany witnessed a substantial price drop, primarily attributed to reduced regional consumption. A key factor in this decline was the global economic slowdown, coupled with escalating inflation, resulting in increased costs for food and various goods. Additionally, the ongoing conflict in Ukraine played a role in weakened demand for coconut oil. The uncertainty introduced by the war in the global economy disrupted supply chains, making the production and transportation of coconut oil more challenging and expensive, consequently dampening demand. Furthermore, coconut oil faced competition from various other vegetable oils, including palm oil, soybean oil, sunflower oil, and rapeseed oil. Recent months witnessed declining prices for these oils due to factors such as increased supply, weakened demand, and the global economic slowdown. Moving into November, the market demonstrated that a significant and ongoing increase in domestic demand was the primary driver of the higher price trend across the local market. Import momentum continued to be affected by trade disruptions, further impacting the overall availability of coconut oil across the region. Additionally, the appreciation of importing nations' currencies, such as the Euro against the US dollar, supported higher purchasing activity for consumers as suppliers and traders could purchase goods at a cheaper rate. However, As December concluded, the Netherlands experienced a notable decline of approximately 3 percent in coconut oil prices. The market dynamics shifted significantly as consumer choices evolved, leading to a substantial drop in coconut oil prices. Some market players strategically reduced their overall selling prices to align with prevailing demand and pricing trends. Considering these factors, the current business landscape suggests that the coconut oil market is poised for a challenging month ahead.
